That article was accompanied by a large photo of her and smaller photos of Phil Flynn -- the former trade union leader and ICC Bank chairman -- and another man said to be a Bulgarian government minister.

She has also sued over related articles in the same edition of the newspaper, published over four pages under the strap line "The SF/IRA crime machine" and including a headline "Phil Flynn, his close female pal and the dodgy Cork financier".

At the High Court yesterday, Ms Nelson, who worked outside Ireland between 1990 and 2005, said she can no longer work as a diplomatic liaison officer due to the articles.

Terrorist

"My life is over," she said. She had "no respect" from people she had worked amongst, could not walk into embassies and believed she was "probably on a terrorist list". She was also "appalled" to be associated with the SF/IRA heist.

The action by Ms Nelson, of Kyleeva, Huginstown, Co Kilkenny, is against Sunday Newspapers Ltd, publishers of the 'Sunday World'.

The articles complained of referred to the garda investigation into the laundering of money from the Northern Bank raid and referred to Ms Nelson having met in Dublin and Bulgaria with Phil Flynn and other persons, including Ted Cunningham, who was later convicted of money laundering.

They also referred to Ms Nelson being arrested and questioned by gardai.

Outlining the case, Michael O'Higgins, for Ms Nelson, said the issue was the meaning of the articles. It was his case the articles would give the average reader the impression Ms Nelson was involved in a very serious and sophisticated operation "cleaning" the proceeds of the Northern Bank heist.

The 'Sunday World' argued the articles did not bear those meanings but instead meant Ms Nelson was "an innocent abroad" who had fallen under garda suspicion and had to be checked out because she was in the company of certain persons.

The court heard Ms Nelson had worked for MacKenzie International in London liaising with several embassies, including the Bulgarian embassy.

Ms Nelson told the court she was not a close friend of Mr Flynn but, in the context of her work in Bulgaria, was contacted by him, as the then chairman of Bank of Scotland, about setting up mortgage houses.

She later travelled back to Ireland but was arrested by gardai. She was released and never charged.